Question to all your real estate agents out there

16 Replies

I am planning to sell FSBO and have an agent who for a small fee will take me through the process by advising me on what to do and how to go about it. He will not represent me in any negotiations, put his name anywhere or such, just make sure I am doing right things.

Questions: 

  • Is that would be a regulated activity, so he would need to obtain a permission from his broker to do that? Does he need to share any of my payments with the broker?
  • What about if he conducts an open house for me? 
  • How about if he put together a valuation report? 

Your views are appreciated.

Exclusive non-MLS listing, limited liability with his brokerage. You do all the work agree to pay the broker a flat fee. He will review and advise and he can not be sued (? state dependent).

Originally posted by @Sam Shueh :

Exclusive non-MLS listing, limited liability with his brokerage. You do all the work agree to pay the broker a flat fee. He will review and advise and he can not be sued (? state dependent).

Why non MLS? I would want to buy one of these 99 MLS listings.

Hello @Jacob Bindler

Questions:

  • Is that would be a regulated activity, so he would need to obtain a permission from his broker to do that? Does he need to share any of my payments with the broker? : Yes (I would guess most brokers say go for it) Yes all money has to go through the broker and his split be taken out because at the end of the day the broker is who you are working with. Advising you implies agency and your best interest must be at heart, their E&O insurance is what will be covering their behavior
  • What about if he conducts an open house for me?: Sure, no issue he can do that. Again though the money has to go through the brokerage.
  • How about if he put together a valuation report? Same as above

Your views are appreciated.

I will note that if you are having one broker put it on the MLS and another one perform tasks such as advising you and Open houses, you may cause legal issues depending on the wording of each contract. Most "MLS only" places charge everytime you call for advice. They also have you sign an "exclusive right to sell" which means you will not be having some other agent doing Open houses and advice. Might want to see if your "advice agent" will put it on the MLS for a flat fee while doing the other tasks.

Good luck with your adventure.

If you're going to use a flat fee listing co, you'll be paying the 2.5-3% to a buyers agent to negotiate against you anyway. If doing that and I needed to be shown what to do, I'd just list with the best agent possible on this one and pay attention.   What sales price are we talking about?

Most agents will provide a CMA in the hopes you will use them. If you are open about what you are trying to do, they will still probably provide it for you. Check their comps though. This should get your valuation.

When I thought you were going FSBO I was going to suggest getting another investor to help you that's not licensed. I sold 2 true FSBOs last year and would help if I was closer. The license and broker relationship hinders their ability to do 'stuff on the side.'. You need a non-licensee.

Anyway, I appreciate your desire to sell on your own but it takes much more than desire.  Learning all the ins and outs and disclosures took me a long time.  I'd list with quality and learn, especially if selling below $200k. Good luck!

Originally posted by @Mike Cumbie :

Hello @Jacob Bindler

  •  Advising you implies agency 

I do not beleive the law put advising in the lisensed activity. Selling, buying, representing, appraising, negotiating are there, but not teaching how. Are you saying an instructor of an class teaching FSBO how to sell has to be lisensed and share a tuition with a broker? What about a writer of a book for FSBO?

@Jacob Bindler , I'm with Mike here. While it's state by state, advising you implies agency. He should discuss this with his broker, and I'm sure he will discover this is not a good idea for him. I think if he gives you bad advice, you could sue him. His broker will not approve of this, I can pretty much guarantee that.

Originally posted by @Mindy Jensen :

@Jacob Bindler , I'm with Mike here. While it's state by state, advising you implies agency. He should discuss this with his broker, and I'm sure he will discover this is not a good idea for him. I think if he gives you bad advice, you could sue him. His broker will not approve of this, I can pretty much guarantee that.

in my case, the "advising" would be telling me what I need to do, not which offer to accept or price to advertise. Anyway, I think an attorney would be in a better position to address it. thanks

@Jacob Bindler ,

You are welcome to do what you want I am not the Department of State. They are ultimately the ones that will decide if the activity is one that requires a license. There is a thing called "Implied Agency" when an agent performs tasks that will give one side the impression that they are working in their best interest. Writing a book or doing a general seminar is not directed at an individual person. Now part of it will depend on the ICA that they signed with their broker. There are the legal ramifications and the ones where they entered into contract with a broker. So if your agent friend signed a 30 page independent contractor agreement that outlines what they can and can't do. They may not be fined by the state, but they could be released from their position.

If our agents do a CMA and get paid a sum, the money goes through the brokerage. We choose not to take a percentage of that, but a company would be well within their rights to do it. Why? Well to do a proper CMA you need to have MLS access. To get MLS access in our area you have to be a licensed agent, to be a licensed agent you have to be attached to a brokerage. In the end the Brokers insurance is at risk for any "Real Estate tasks" your friend performs.

On to Open Houses. If the agent does an Open House and "identifies features" or engages in conversations about the property, then they are required to have a License. An Agents license is held under a broker and the broker is responsible for anything they do, so yes, they need to go through their brokerage. Unless they are just sitting there acting as security and not pointing out anything.

Now your agent friend is more than welcome to get their brokers license and then sponsor a million agents who they allow to do whatever they want under him/her for free. It's their insurance and license on the line. It wouldn't be the first attempt at playing coy with a broker and it won't be the last. As long as they are prepared to have their license released back into the ether and not be able to practice any real estate then they are welcome to go for it. 

Originally posted by @Trevor Rutherford :

If he is not representing you in any way, I don't see why he would need permission. How do you plan to rout the transaction?

What do you mean "rout"? It is just like a usual FSBO, but with someone telling me over the phone what I need to do. I am doing everything on my own.

@Jacob Bindler

"I am planning to sell FSBO and have an agent who for a small fee will take me through the process by advising me on what to do and how to go about it. He will not represent me in any negotiations, put his name anywhere or such, just make sure I am doing right things."

In full disclosure you should mention that you are running a company that's purpose is to help people FSBO by offering services you will profit from. While I have zero issues with you doing that, you should disclose that to people answering your post. It is not really a "Help me with FSBO" questions. it is a "Help me move my business forward by adjusting my business model".

As stated I have no problem with you finding information for that, but people replying should know it's purpose is for your business gain as opposed to "a lowly homeowner trying to get ahead in this poor world". After review I realized you did send me a message about 8 months ago asking me to join your site as a "freelance agent", which was mutually declined.

That being said: Pretend a licensed brake mechanic just "advises" a person to do their neighbors brakes and stands their making suggestions on how to tighten the pads and the thickness of the rotors. When the brakes fail and it slides into a school bus, i doubt any parent is going to say "don't go after the "adviser" or the "advisers company who he works at doing brakes". As most ways around licensing it is great until it is challenged, then all of a sudden people are shocked they are liable. 

Personally I work above board, I avoid the "grey areas" as much as I can and play by the rules because I am not a fan of court rooms or depositions. You can move around the NYS rules or "skirt them" and call it "innovative" and I do hope it works out for you. I am a huge fan of new ideas and hope it works out for you. I would prefer an honest dealing though.

Best of luck in your business.

An agent can act as “transaction broker” to assist both parties with the paperwork after they have agreed on price/basic terms.

They will charge a small commission usually 1-1.5% and are not representing either party. The money will run through the brokerage, etc.


That being said: Pretend a licensed brake mechanic just "advises" a person to do their neighbors brakes and stands their making suggestions on how to tighten the pads and the thickness of the rotors. When the brakes fail and it slides into a school bus, i doubt any parent is going to say "don't go after the "adviser" or the "advisers company who he works at doing brakes". As most ways around licensing it is great until it is challenged, then all of a sudden people are shocked they are liable. 

My business, which I do not hide or promote here, aside one should consider the probability of failure of the brakes that are fixed by the person without an advice versus with the advice. So, I want to find the way to help people who choose to fix their breaks on their own while some of us here would rather see them slide into the bus.  

@Max T.

"An agent can act as “transaction broker” to assist both parties with the paperwork after they have agreed on price/basic terms. They will charge a small commission usually 1-1.5% and are not representing either party. The money will run through the brokerage, etc."

NY does not have transaction brokers. It is not recognized like it is in other states. The OP is in NY which has very specific requirements regarding agency and responsibility to parties. NY does not have a "I represent neither side... role" like other states do. Of course the OPs site is a nationwide thing so it may be perfectly fine in some locals.

Do you plan to use a real estate attorney? Tittle company? Or do it yourself? And if you're doing it yourself, what means are you using to make sure the title is clear of any leans and making sure that the transfer of ownership is a smooth process?

@Jacob Bindler Although you are getting some service from this agent for a fee, you are missing the best part of listing on the MLS. There are hundreds of agents in your area that are showing houses to buyers every day. They will not be showing yours. Wouldn't it be worth paying a commission to get multiple offers for your listing?